Tag Archives: Jeremy Palmer

Medicaid managed care market penetration quadruples over past decade

Milliman has announced the availability of its annual research into the financial results and administrative expenses associated with Medicaid managed care plans. This year’s report marks the tenth edition of Milliman’s research, and combines the financial and administrative analysis into one comprehensive report including an in-depth examination of Medicaid managed care plans’ medical loss ratios (MLR), administrative loss ratios (ALR), underwriting ratios (UW ratio), and RBC ratios. The information is of significant value to the Medicaid industry as enrollment and revenue continue to increase year-over-year.

Observing the changes that have occurred in the Medicaid managed care landscape over the last ten years provides valuable insight into the makeup of the market. We have made enhancements to this year’s report that help to highlight the growth in this industry and the ebb and flow of experience over time.

Key findings from the analysis include:

• The average underwriting gain of 0.9% in calendar year (CY) 2017 remained relatively stable from the composite gains observed in CY 2016.
• During the past ten years of our analysis, the data studied for the report has seen a 250% growth in membership and over 400% growth in revenue for the studied Medicaid managed care programs
• Administrative expenses continue to increase on a per member per month basis, but decrease as a percentage of revenue has been observed from CY 2016 to CY 2017.

To see the Medicaid administrative expenses report, click here.

Medicaid risk-based managed care: Analysis of administrative costs for 2016

In this report, Milliman consultants summarize calendar year 2016 administrative costs of organizations reporting Medicaid experience under the Title XIX Medicaid line of business on the National Association of Insurance Commissioners (NAIC) annual statement. The primary purpose of the report is to provide reference and benchmarking information for certain key administrative expense categories used in the day-to-day analysis of Medicaid managed care organization (MCO) financial performance. It also explores the differences among various types of MCOs using available segmentation attributes defined from the reported financial statements.

Medicaid risk-based managed care: Analysis of financial results for 2016

This report by Milliman’s Jeremy Palmer and Chris Pettit summarizes calendar year 2016 financial results of organizations reporting Medicaid experience under the Title XIX Medicaid line of business on the National Association of Insurance Commissioners (NAIC) annual statement. The primary purpose of this report is to provide reference and benchmarking information for certain key financial metrics used in the day-to-day analysis of Medicaid managed care organization (MCO) financial performance. This report explores the differences among various types of MCOs using available segmentation attributes defined from the reported financial statements.

Milliman releases annual analysis of Medicaid managed care financial results

Milliman today announced the availability of its annual research into the financial results associated with Medicaid managed care plans. These plans have become increasingly popular, which is due to the Medicaid expansion provisions in the Patient Protection and Affordable Care Act (ACA) and the continued growth of the managed care delivery system within Medicaid. This information is especially valuable now, with the recent release of the Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) by the Centers for Medicare and Medicaid Services (CMS). The CMS regulations require reporting and monitoring of Medicaid managed care medical loss ratios, and may be useful as the industry contemplates the financial consequences of the new regulation.

We are excited about this year’s iteration of the report because of its relevance with the recently finalized Medicaid managed care rule published by CMS. This is an area of intense focus for the industry as we look to quantify the various impacts of the new regulation. This report has become an industry standard, and it allows us to offer analysis as Medicaid continues to evolve.

Key findings from the analysis include:
• Average profit increased from 2.1% in calendar year (CY) 2014 to 2.6% for CY 2015
• Revenue captured by the study increased by 30%
• The medical loss ratio (MLR), using the CMS definition, was 90.2% in CY 2015, more than 5% higher than the minimum 85%

The financial results report is now in its eighth year of publication and is widely cited by the industry. An accompanying report related to Medicaid administrative costs is anticipated to follow the release of this report.

To see the Medicaid financial results report, click here.

Milliman releases new analysis of Medicaid managed care administrative costs

Milliman today announced new research into the administrative costs associated with Medicaid managed care plans. These plans have become increasingly popular, which is due to the Medicaid expansion provisions of the Patient Protection and Affordable Care Act (ACA) and the continued growth of the managed care delivery system within Medicaid. This information is especially valuable now, with the release of the proposed 2016 Centers for Medicare and Medicaid Services (CMS) capitation rate-setting guidance and the CMS proposed rule for Medicaid managed care. These CMS regulations require greater documentation of Medicaid managed care administrative costs, and may be useful as plans look to establish benchmarks.

We are excited about the addition of the administrative cost report to the annual financial analysis of Medicaid risk-based managed care reporting. This is an area of intense focus for the industry as we look to meet increased expectations of transparency in capitation rate-setting and face regulatory reporting of medical loss ratios.

Among other findings, the analysis demonstrates that Medicaid managed care administrative costs are primarily driven by expenditures for human capital and non-income-based taxes and fees.

The administrative cost report complements Milliman’s annual analysis of Medicaid managed care financial results, which is now in its seventh year. The administrative cost report will be updated annually.

To see the administrative cost report, click here. To view the annual financial analysis, click here.

Fixed offer or competitive bid? Choosing the right Medicaid managed care contracting methodology for your state’s needs

Medicaid revenue to risk-based managed care plans has increased significantly in recent years, and there’s now mounting pressure on state Medicaid agencies to deliver quality care and contain costs. Agencies must consider the long-term stability of their Medicaid programs through changes in population, cost trends, and care practices. How Medicaid contracts are awarded to managed care plans can have a major impact on how well they support strategic outcomes and can have unintended consequences if agencies don’t carefully consider their specific markets and regulatory realities. This Medicaid briefing paper authored by Milliman consultants Jeremy Palmer and Rob Damler provides more perspective.

Ikaso Consulting’s Reiko Osaki and Tom Arnold also contributed to the paper.